The Next and Final Lean Frontier

The one group that has been allowed to opt out of the lean transformation has been Sales & Marketing – and that is about to end.

We have lean manufacturing ad nauseum, TWI summits and lean accounting. The boys and girls from the Lean Summits are launching one on lean logistics, and there are a number of forums on lean product development. And of course there is lean office to cover all of the administrative functions and processes. Sales & Marketing, however, have been able to hang on to their unique status as a group apart and remain uninvolved. Given that they are the primary link to the customers, and the basic objective of lean thinking is to create superior value for customers while minimizing waste – defined as everything and anything the customers won't pay for, the days of allowing Sales & Marketing folks to keep tripping along their merry, old school ways are rapidly coming to an end.

The driving idea behind sales and marketing in the old model has been to control the message – define the brand – shape customer perceptions – in short, to spin the reality of the product into an image that would convince people to but something they may or may not really want or need, and to convince people that the product was better than it really was and better than the other guys'. That doesn't work any more.

Perusing the most recent issue of the Brandz Top 100 Global Brands Rankings, just how thin the old thinking dominating sales and marketing has become is rather apparent. Right up front they make the statement, "The role of the brand is growing in today's uncertain economic environment, people need something they can trust and increasingly they are turning to brands." I think that falls under the category of repeating a lie often enough in hopes that people will eventually believe it. They are trying to convince someone – themselves maybe – that things haven't changed.

The whole premise of the brand value is nonsense from the get go. They assume that the value of the brand is in the brand itself – the name of the company or product has value - rather than the product itself. It is increasingly apparent that the 'brand' is only as valuable as the last product sold under that name. The Toyota 'brand', according to these guys is worth 27% less now than a year ago. On the other hand, the Visa 'brand' is worth 52% more. It is pretty common knowledge that the Toyota 'brand' is a function of their equivalent of the Edsel and the Corvair wrapped into one – nothing to do with the name, and everything to do with the dog of a car they sold.

The Visa 'brand' is not more valuable because of anything Visa has done so much as it is the fact that the use of debit cards is exploding. That's why Mastercard is up 57% too. Nothing to do with the brands – everything to do with the expanding application of the products. It is somewhat misleading – a whole lot misleading, in fact – to insinuate that Visa is up 52% in value because of 'brand management'.

The big lie in the opening blather about people 'increasingly turning to brands' is set on its ear within their own report. "The recession hurt the growth of premium coffee brands and led to a consumer drift to own label." What – "own label"? What happened to "something they can trust"? Then we have the self-fulfilling prophecy approach … "Tesco promoted a discount "own label" (store brand) without diluting its mid-market brand positioning. That effort helped the UK grocer achieve a 12 percent increase in brand value." So by rejecting brands, Tesco became the 'brand'. Some logic in that, I suppose, but hardly the sort of 'brand management' the sales and marketing folks have come to know and love. More like running up to the head of the parade so you can look like you are leading it.

It goes on and on … "Price conscious consumers were willing to trade down and even out of a brand, sometimes to its own label, especially when drinking spirits at home" … "Consumers select a brand for the reassurance of authenticity, quality and value it provides. House brands are increasingly filling those needs ..." The bottom line is that it is not about brand management, it is about product management – designing and making them.

The biggest change in sales and marketing is that they get less and less control of the message. There was a day when they could concoct any story their imaginations allowed. Now the customer controls the message more and more. P&G tried to stroke maternal emotions with their sappy Mother's Day website. Instead they are battling a PR fight of epic proportions as those mothers want to know why P&G diapers gave their kids painful rashes and burns.

Simply put - make products that sell at a good value proposition and the brand will take care of itself. Worry about the brand as a stand-alone entity as these folks seem to and be prepared to face an angry mob of customers on Facebook and elsewhere.

More ominous is Ad Selector. When the marketers couldn't force folks to sit through their TV ads any more, thanks to TiVo, they have attempted the same on the Internet with the annoying ads you have to sit though to see any video news coverage. With Ad Selector, people still have to sit through an ad – but they get to choose which ad. A marketer better come up with ads that are either very informative or very funny as they have to compete with other ads for customers' attention.

It all boils down to an end to games, spin and nonsense – and the beginning of an age in which value is the controlling factor. The customers define the issues and form their own perceptions. The role of sales and marketing in the lean enterprise is to clearly understand how the customer defines value – what they will pay for and what they won't – and to deliver that message back throughout the organization. In short, they have to join the team – no more cowboying out there as some independent group, oblivious to the realities, limitations and capabilities of manufacturing and engineering. Creative writing and multi-color art work won't deliver value. Good products that fulfill customer requirements at a price that includes a minimum of waste is the key to success – and even survival.

Time for sales and marketing to get out of the clouds and into the lean game. They have to start listening closely to customers instead of telling customers what to think, and then conveying that customer message back to the rest of the company in a clear and comprehensive manner.

Comments

Amen! The “brand” bandwagon harks back to the days of Marshall McLuhan – image is not reality, the map is not the territory. I had the misfortune to work with an HR/OD manager once who argued that image is reality when it came to employees perceptions of managers. True, at a particular moment to the perceiver, image is their reality. Image can be clarified, however, to reflect reality. Reality is what it is.

We have constant arguments about improving the image of manufacturing, for example, but it won’t change unless manufacturing changes. It is changing, but only a little. The floors may be cleaner, but overall, manufacturing is not rewarding as a work environment.

Back to brands – they function as image or map, and simplify (and fictionalize) a person’s understanding of reality or the territory.

The only way to permanently affect the marketplace is to challenge and improve reality.

One particular way in which marketing could add value is by focusing on *making the company easier to do business with*, whatever that may involve in terms of changing the behavior of various groups within it.

I have gotten at least 50 direct mail pieces from Verizon–probably more than 100–pushing their FIOS service. But when I tried to actually *buy* it (when my normal Comcast service was out), the guy showed up without the right tools and wanted to reschedule. In another case, when I looked again at purchasing the service, the on-line rep was unable to tell me what the price would be for an additional phone, and that I’d have to contact a different group to get a quote on that! Moreover, as a customer of VZ regular phone service, I have *never* had a positive customer support experience.

So VZ would do better to spend less on direct mail and more on fixing their dysfunctional approach to doing things..but that’s harder, of course.

“Advertising & Sales Promotion” should be a *subset* of “marketing,” not the whole thing.

About another pet peeve of yours – Did you see the HP flyer that was stuffed into this morning’s USA Today? The front has a laptop over a man’s head with the text, “The Computer is personal again. How the Lean Get Mean.” Interesting branding with a very twisted message.

I’ve been working in the field of lean product development for eight years, and I’ve known quite a few marketing people who “get” that a relentless focus on customer value will lead to products that are easier to promote and sell.

I’ve also seen some killer A3 reports coming from marketing groups once they understand the power of structured problem-solving with a communication tool that supports it.

A commissioned sales person receives direct bottom line benefits when a sales process redesign reduces the amount of time spent on paperwork.

There is nothing fundamentally wrong or different with the sales and marketing people that keep them from embracing lean.

Why don’t they? Have we asked? Or have we assumed that sales and marketing people are somehow different, and left them out of the process?

There is another interesting twist to this, the brand of the change programme. I often see change programmes with fancy names and logos to brand the programme within an organisation. They embark on sending email and doing presentations (marketing) and trying to encourage the parts of the organisation that have not yet started on the programme to join (sales).

I wonder at the need to brand change. I wonder if all that money and effort could be better aimed at the core improvement which others in the organisation could then judge for themselves. Similar to your argument that companies should concentrate on good products and services since that is what makes the brand.

Karen – I think that ‘image is reality’ mindset is a hangover from the LSD craze. There seem to be a lot of folks my age who confuse the two

David – As a Verizon customer I feel your pain. I don’t have many service complaints with them, but if they were to quit filling my mail box and give me a rebate for the paper saved I would be very happy.

One time I slipped on the USA Today in the hall outside my room and fell down. Since then I have always thrown them into the trash inside the room to make sure no one else has the same problem.

David–the Verizon brand is pretty tarnished. They blitzed me with FIOS propoganda when I moved last year then when I called to order it they told me FIOS wasn’t available in my area!

Bill–Tom Peters has made a career out of Brand You! It’s not about how much value I bring to my employer or customers, but about how much WOW I bring to my own personal BRAND. You are going to burst his bubble. (We can hope.)